Retirement savings: How can you save without a 401k?
(NewsNation) — Even if you don't have a 401(k), there are several ways you can make sure you are saving for your retirement.
According to Fidelity, some of the other options you can consider include IRAs, SEP IRAs and self-employed 401(k)s.
Are people 'panic buying'? Economist explains which big purchases you may want to make now
Here are some of the ways you can save for retirement without a 401(k):
An individual retirement agreement, or an individual retirement account, can be opened by anyone who has earned income. This includes those who might not have a job, but have a spouse who is employed. When choosing an IRA, you will need to choose between a Roth IRA and a traditional IRA.
Summer travel may actually be cheaper to certain destinations, expert says
A Roth IRA will allow your contributions and earnings to grow tax-free. You will be able to withdraw the money from your Roth IRA tax-free after you turn 59½, as long as your account has been open for at least five years.
A traditional IRA allows you to contribute money before or after taxes. You can grow your money tax-deferred, however, you will pay ordinary income tax on your withdrawals. Also, you have to start taking distributions after you turn 73. There are no income limitations to opening a traditional IRA, unlike with a Roth IRA.
A Simplified Employee Pension plan, or SEP IRA, could be a good option if you are self-employed or have freelancing income. If you are a sole proprietor or part of a partnership, C-corporation or S-corporation, you are eligible for an SEP IRA.
Recent college grads face toughest job market in years
Your contributions could be tax-deductible, according to Fidelity. Typically, employees aren't allowed to contribute, and only employers can. There is an option for employees to be able to make traditional IRA contributions, but these would count toward the annual limit for IRAs.
If you want to set up an SEP IRA, you will need to do so before the federal income tax filing deadline.
If you are self-employed, you could start a self-employed or solo 401(k). This also applies to you if you own a business or partnership that has no employees or if you have a spouse who works in the business.
You can contribute to a self-employed 401(k) in two ways: as the employee and again as the employer. As an employee, you can make a tax-deductible or Roth contribution of up to 100% of what you are paid up to a maximum. Once you are over 50, you can make catch-up contributions.
Texas woman who won $83.5 million jackpot still not paid 3 months later, sues Texas Lottery Commission
As the employer, you can contribute up to 25% of your earnings that are considered eligible. These contributions will always be before taxes. As a small business owner, you could save a lot of money each year with a self-employed 401(k). The deadline to set up a plan is the employer's tax filing deadline.
Other plans to consider are SIMPLE IRAs and a health savings account. A SIMPLE IRA is similar to a 401(k) in that it offers before and after-tax contributions. It also has an employee contribution and employer match. If you are self-employed or a small business owner, you can open a SIMPLE IRA.
Trump tariffs set to collide with back-to-school shopping
A health savings account, or HSA, you can benefit from tax deductions, tax-free growth potential and withdrawals that are tax-free to pay for any qualified medical expenses. These expenses could be paid for before or after your retirement.
Then, after you turn 65, you can withdraw money from the HSA without facing any penalties. However, you will owe taxes on contributions and earnings.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
3 hours ago
- Yahoo
How Trump's Big Beautiful Bill will raise household energy costs
Energy policy analysts are in broad agreement about one consequence of major legislation that Republicans are currently pushing through Congress: It will raise energy prices for the average American household by hundreds of dollars, once all is said and done. That's because the legislation, which President Donald Trump has dubbed the Big Beautiful Bill, will repeal the vast majority of clean energy provisions contained in the Inflation Reduction Act, or IRA, which a Democrat-controlled Congress passed in 2022. That earlier law provided a wide array of financial incentives for the deployment of electricity sources like solar, wind, battery storage, and nuclear power, as well as support for consumers looking to buy zero- and low-emissions products like electric vehicles. Choking off support for those measures not only hobbles U.S. efforts to fight climate change — the IRA, if left intact, could single-handedly reduce the country's carbon emissions by 40 percent — but it also means there are fewer new sources of energy for a country that has started to need more and more of it. And reduced supply coupled with increased demand means higher prices. That's the virtually unanimous conclusion of the academics and policy experts who have been trying to understand the likely effects of the rollback for the past few months, though each group of experts used different assumptions about the full extent of IRA repeal, given that the legislation is still currently being revised by the Senate. Part of the reason for this unanimity is that, once constructed, many newer energy sources like wind and solar don't have substantial operating costs, compared to traditional power plants that must be continuously supplied with fuel. 'Clean electricity has zero generation cost,' said Robbie Orvis, a senior director for modeling and analysis at Energy Innovation, a nonpartisan think tank. 'One of the dynamics is that less clean electricity gets built, and that makes power generation more expensive, because we're relying more frequently on fossil fuels with higher generation costs.' Orvis' group calculated that those higher power generation costs from using coal or natural gas, along with other price increases stemming from IRA repeal, would result in household energy costs rising by more than $33 billion annually by 2035, compared to a scenario in which the IRA were left intact. That works out to roughly $250 more per year per household. Other analysts came to similar conclusions: The Rhodium Group, an independent policy analysis firm, estimates that average household costs could be as much as $290 higher per year by the same date. Princeton University's ZERO Lab projects that energy costs could grow even higher: Their estimates show that, in a decade, annual household prices will be $270 to $415 higher under the GOP plan. Energy Innovation's analysis calculated the effects of repealing the IRA on energy bills and transportation costs across the nation. They found that, if the tax credits for clean energy are taken away, utilities will increasingly rely on natural gas and coal, which have higher generation costs. These costs would then be passed on to customers. Additionally, as electric utilities' demand for natural gas increases, the cost of the fossil fuel in the market will also rise, further raising household energy bills. 'Gas suppliers can't respond immediately to large changes in the demand for gas,' said Orvis. 'The change in gas demand is pretty large without the tax credits. So you're really increasing the reliance on gas, and therefore, gas demand and gas prices.' On the transportation front, the legislation passed by the House of Representatives eliminates IRA tax credits for electric vehicles and undoes the nation's latest tailpipe standards, which limit the amount of pollution that new vehicles are allowed to emit. The result is a greater reliance on gasoline than would happen under the status quo — and more demand for gasoline means higher prices at the pump, per Orvis' modeling. These price spikes — and the electricity spikes in particular — won't be felt uniformly across the nation. One key factor is how utilities in a state are regulated. Many states have just one utility that both generates power and provides it to electricity customers. But in so-called deregulated markets such as Texas and Pennsylvania, electricity providers compete on an open market to sell their power. The rules around how utilities calculate and pass on the costs of generating electricity vary significantly between these two models. In regulated markets with just one provider, the cost of generating electricity and getting it to homes is averaged out and passed on to customers. But the competitive nature of deregulated markets means that customers can see wild fluctuations in price. During peak winter and summer, when demand for power is high, prices can be double or triple normal rates. As a result, customers in deregulated markets see more variation in their bills — because those bills closely track changes in the marginal cost of electricity. If those costs rise in a dramatic and systematic way because IRA repeal leads to fewer sources of energy, customers in deregulated markets will feel the full force of it. Customers in regulated markets like much of the Southeast, on the other hand, will be somewhat cushioned from the increase, because their costs reflect the average of all generation and transmission costs incurred by their utility. 'That helps minimize the impact of repealing IRA tax credits — though it also runs the opposite way and helps reduce savings when market prices go down,' said Jesse Jenkins, an associate professor at Princeton University who led the modeling conducted by the ZERO Lab, in an email. These rising costs will come on top of U.S. energy bills that are already ticking upward. Electricity prices have been steadily rising since 2020, and the federal Energy Information Administration recently forecasted that that trend is likely to continue through 2026. Prices have increased for a variety of reasons, including Russia's invasion of Ukraine disrupting global oil and gas supply chains, extreme heat and other weather shocks, costly maintenance needed to protected the grid from wildfires, and the buildout of additional capacity to meet growing demand. U.S. electricity demand is beginning to rise for the first time in decades, thanks to the construction of new manufacturing facilities and data centers, which support operations like cloud computing and artificial intelligence, as well as the growing adoption of electric vehicles. Orvis said that the IRA has been helping meet that demand and maintain the country's competitive advantage with China, one of the Trump administration's stated goals. The so-called Big Beautiful Bill would undermine that progress by reducing the amount of energy available for new manufacturing and AI development — and making the electricity that's left more expensive for everyone. 'The ironic thing is that what's in the bill, the net results of it will be completely contradictory to what the [Trump] administration's stated policy priorities are and will cede a lot of the AI development and the manufacturing to China specifically,' said Orvis. 'That's the important macro context for everything that's happening now — and some of the un-modelable implications in the long run.' This story was originally published by Grist with the headline How Trump's Big Beautiful Bill will raise household energy costs on Jun 6, 2025.
Fast Company
3 hours ago
- Fast Company
Here's how to start investing in your 60s
Standard financial advice starts with the assumption that 40-year-old investment newbies are getting a 'late start.' So what if you're a card-carrying member of AARP without a portfolio? How do you start investing when you're in your 60s? Recently, a family friend reached out for some advice on how to start investing for retirement. At 61 years old, he was afraid it was useless because he had heard the standard tut-tutting about how he should have started earlier. Once I got over my shock at his age (because that means I've reached my late 40s and I have no idea how that happened), I assured him that it's not too late. Just because a lot of retirement math starts with the wonders of compound interest over time doesn't mean your retirement is doomed. Becoming a first-time investor in your 60s may feel scary, but it's the best way to ensure you have a financially secure retirement—unless you can get your hands on some kind of time traveling phone booth. Here's what you need to know about beginning your investment journey long after hitting the big 6–0. Start setting money aside right away And when I say right away, I mean right this minute. Putting money aside for retirement is the kind of important-but-not-urgent task that is very easy to put off, which is why 20% of Americans over the age of 50 have nothing set aside for retirement, according to a 2024 AARP survey. If you already have an IRA, 401(k), or other retirement vehicle, transfer whatever amount you can afford today, and set up an automatic contribution to come out of every paycheck. If you don't already have a retirement account, take a half hour today to set one up with a reputable brokerage like Vanguard, Fidelity, or Schwab. Each of these brokerage firms offer retirement accounts, education, and tools for newbie investors. Additionally, each major brokerage has customer service available by phone and online chat that can walk you through the process of opening an account and setting up a recurring contribution. Asset allocation in your 60s Of course, it's not enough to set up your retirement account and your contributions. You will also have to decide how to invest your contributions, which feels a little more complicated in your 60s than it is for younger investors. That's because the traditional advice for retirement investors is to buy-and-hold index funds, allowing time and compound interest to perform their magic on your money. But sixtysomethings don't have the same luxury of time enjoyed by whippersnappers in their 20s, 30s, 40s, and 50s. Except, that's not necessarily true, is it? The Social Security Administration estimates that a current 60-year-old man has a life expectancy of 80 and a 60-year-old woman has one of nearly age 84—which means investors in their 60s can and should invest some portion of their money for a longer time horizon. Older first-time investors need to allocate their retirement money the same way every investor does—by when they expect to need it. This is often referred to as the bucket method, and is often broken down into three investment buckets. Short-term investments: Since you will use it for living expenses in the first one to five years after you retire, you want this money to be invested in assets that are reasonably stable and liquid. Medium-term investments: This money will provide you with retirement income for years six to 15, so you'll invest it in slightly more aggressive investments that still aim to protect your principal. Long-term investments: You won't plan to touch this money until at least 16 years in the future, so you can afford to invest in higher-risk-higher-return investments, giving you time to ride out market volatility. Put away as much as you can While your future self will be glad for whatever amount you can put aside for retirement today, more is definitely better in this scenario. Luckily, the IRS agrees with the importance of saving for retirement. Contributions to traditional IRA and 401(k) accounts are tax-deductible, meaning the money you put in those accounts lower the amount of your taxable income for the year. The IRS allows the gray-haired set to make tax-advantaged catch-up retirement contributions to IRA and 401(k) accounts. For 2025, the IRA contribution limit is $7,000 for anyone under the age of 50, and $8,000 for anyone over the age of 50. For 401(k) accounts, the contribution limit is $23,500 for those under age 50, $31,000 for anyone between the ages of 51 and 59, $34,750 for those between the ages of 60 and 63, and it drops down to $31,000 to anyone 64 or older, because the IRS is nothing if not confusing. In 2025, if you are… You can contribute this much to an IRA You can contribute this much to a 401(k) Under 50 $7,000 $23,500 50 to 59 years old $8,000 $31,000 60 to 63 years old $8,000 $34,500 64+ years old $8,000 $31,000 Find other sources of investment money If every dollar is spoken for before your paycheck even hits your account, the idea of maximizing your retirement account contributions may feel quaint. So it's helpful to start identifying some other sources of investment money. You may have more cash available to invest than you realize. Check for old 401(k) accounts Once you're blowing out 60 candles on your birthday cake, you likely have multiple careers under your belt, let alone shorter-term jobs you've forgotten about. You may have unclaimed retirement benefits gathering dust. A quick search of the National Registry of Unclaimed Retirement Benefits can let you know if you've got some retirement money languishing in an old account. See if you have unclaimed funds An estimated one out of every seven Americans is owed unclaimed property totaling $70 billion as of 2023. You can search for unclaimed funds by visiting the National Association of Unclaimed Property Administrators and searching any states where you have lived. Sell things you no longer want or need You probably have a lifetime's worth of accumulated clutter, some of which may actually be worth some money. Cleaning out your stuff to find hidden gems will not only help you pad your retirement accounts, but it will also help you with any downsizing you may want to do before retirement. But DO NOT invest your Social Security benefits If you're looking for other sources of investment money, taking your Social Security benefits as soon as you turn 62 and investing that money may seem like a no-brainer. But it is nothing short of a terrible idea. That's because your Social Security benefits are as close to a financial guarantee as you're going to get in this world. Your Social Security benefits are backed by the full faith and credit of the United States government—which, admittedly, has lost a little of its luster and reputation recently. But you can absolutely count on the monthly amount promised to you, the approximate 8% per year delayed retirement credit for waiting to take your benefits, and the annual cost of living adjustment. No investment can promise any of those things. Investing your Social Security benefits means you could lose that money. Taking your benefits as of age 62 means you will lose out on the guaranteed delayed retirement credit of 8% per year. And no investment can guarantee an annual return of 8%, let alone a cost of living adjustment to account for inflation. If you are able to delay taking your Social Security benefits, it is generally best to wait to take them until you have reached age 70 so you can maximize your monthly benefit amount. Other than yesterday, the best time is now There is no point in beating yourself up with coulda-shoulda-woulda thinking if you get started investing later in life. It's counterproductive to ruminate over things you can't change, especially since there's still a lot of good you can do as a 60-something newbie investor. The first thing to do is start right away. If you have a retirement plan, move money into it today and set up a recurring contribution. If you don't, open one with a reputable brokerage firm today, taking advantage of the customer service phone or chat options to help you lower the barrier to entry. Once you have the account and automatic transfer in place, plan your asset allocation. Even though you don't have the luxury of time like a young investor, you can still set up a three-tiered investing strategy. Your short-term, stable investments are for the money you'll need in the next one to five years. The medium-term, slightly more aggressive investments will be accessed in years six to 15. And your long-term, higher-risk, higher-return investments will be left alone until year 16 and beyond. It's important to put aside as much money as you can. If you're able to maximize your 2025 tax-deductible IRA and 401(k) contributions, that will lower your tax burden, which may help you afford the contributions. But you could also look for other sources of investment money, such as searching for forgotten retirement accounts and unclaimed funds, or by selling off some of your accumulated stuff as part of a downsizing effort. But do not use your Social Security benefit as a source of investment money. That's trading a guarantee for a risk.
Yahoo
6 hours ago
- Yahoo
Recession ‘100% on Trump's shoulders': Andrew Yang
(NewsNation) — Andrew Yang, a 2020 Democratic presidential candidate, says Elon Musk is '100% right' that the Trump administration's tariffs will 'push us into a recession in quarter three and four of 2025.' Yang joins NewsNation's 'CUOMO' and says the United States has never had 'one person's bone-headed decisions bring us into a recession, and that is the Trump presidency.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
